AmFIRST portfolio may expand by over 20% by FYE2012

KUALA LUMPUR: AmFIRST Real Estate Investment Trust (AmFIRST) may enlarge its portfolio value by over 20% by the end of this financial year (FY2012) if it holds any fundraising exercises this year, said Lim Yoon Peng, CEO of the fund's manager Am ARA REIT Managers Sdn Bhd.

The fund will have a gearing level of 45.84% following the acquisition of office buildings Prima 9 and Prima 10 in Cyberjaya for RM133 million, which means it can acquire up to another RM92 million worth of assets before its gearing level hits 50%, the threshold allowed by the Securities Commission, he said.

"We can buy up to RM90 million worth of assets, bringing it up to nearly 20%. But if we do any fund raising which will take three or four months to complete, it will then be sometime in November or December, and then we acquire we may exceed 20% growth by this financial year (ending March 31, 2012)," he told reporters at a briefing last Friday, June 10.

"Of course, we will explore funding option, so the next thing is if we find another asset, we can still buy it without any capital raising. Of course, going forward, options available to us  to raise fresh capital either by placement or by rights issue," he added.

As at March 31, AmFIRST has an approved fund size of 429 million units, while it closed at RM1.18 today, up one sen.

Lim also said the fund will also consider acquiring properties outside of central business districts (CBD) as it sees little room for growth in Kuala Lumpur's centre, given the supply glut of office spaces.

On their most recent purchase in Cyberjaya, he said the area is very vibrant and has excellent growth prospects following the opening of the Maju Expressway (MEX).

He added that he hoped to work with developers in the area for further acquisition opportunities.

Meanwhile, Am ARA REIT Managers will also spend RM6 million upgrading Bangunan AmBank Group and RM6.3 million on Kelana Brem Towers. Work has started on the former.

Currently, AmFIRST's portfolio is valued at RM1.02 billion, comprising Bangunan AmBank Group, AmBank Group Leadership Centre, Menara Merais, Menara AmBank, Kelana Brem Towers and The Summit Subang USJ.

The fund's total net lettable area (NLA) under its portfolio stands at 2.35 million sq ft, and with the addition of Prima 9 and Prima 10 its NLA will rise to 2.56 million sq ft while the value of its assets will grow by 13% to RM1.15 billion.

Meanwhile, its distribution per unit (DPU) may be increased with its latest acquisitions. The new buildings are expected to add 0.68 sen in DPU.

The press briefing took place after a signing ceremony between AmFIRST's trustee Mayban Trustees Bhd and Prima 9 and Prima 10 vendor Complete Event Sdn Bhd.